Weimar charged in corruption probe

Lisa Demer

Bill Weimar, who rose to political prominence in Alaska and became king of private halfway houses, was charged this morning with two federal charges, including conspiracy, in U.S. District Court in Anchorage.

Weimar, a Democratic activist in his younger days, is scheduled to appear in court later this afternoon to plead guilty to the felony charges.

The deal was negotiated with prosecutors, court documents say. While the arrangement doesn't bind a judge to a particular sentence, prosecutors have agreed to seek less time in exchange for Weimar accepting responsibility. A plea agreement filed in court estimates a sentence of 10 to 16 months.

Prosecutors outline a scheme in which Weimar funneled money to an unnamed consultant for an unnamed state legislative candidate in 2004. Weimar had a longstanding relationship with the candidate and knew he would push for a private prison if he won, the charging document said. Weimar held a "contingent interest" in a private prison project worth $5.5 million, but only if the project were completed, the charges say.

Weimar, who owned Allvest Inc., becomes the 11th person charged in the broad, ongoing investigation by the FBI and U.S. Department of Justice into political corruption in Alaska. Weimar, 68, now lives in Big Arm, Mont.

The criminal complaint filed in Anchorage accuses Weimar of conspiracy to commit honest services mail and wire fraud, as well as a charge of "structuring financial transactions."

Prosecutors describe the latter as an effort to evade laws that require reporting of large withdrawals from bank accounts. They accuse Weimar of paying the consultant a total of $20,000 in August 2004 during the primary to cover expenses for the candidate, without reporting the payment and without routing it through the campaign.

Weimar divided the money he paid to the consultant into three payments, each less than $10,000, according to the charging document.

The consultant, also not named in the charges, was based Outside and provided advertising and consulting services for the campaign.

For years, Weimar pushed plans for a private prison in Alaska, but the project was always controversial and no prison was ever built.

The charges do not name the private prison company, but for years Cornell Corrections Inc. tried to build a prison in various Alaska communities, including Delta Junction, Kenai and Whittier. The charging document describes the unnamed company's Alaska interests as halfway houses, a planned juvenile treatment center, and a private prison project, and that matches Cornell's interests.

In 1998, in the midst of planning for a private prison in Delta Junction, Weimar sold five Alaska halfway houses to Cornell Corrections for $21 million. He also formed a partnership with Cornell to pursue the Delta prison and subsequent deals for a private facility.

One goal of the conspiracy was to get the private prison company to give campaign contributions to the candidate to help win election, according to the charges.

A spokesman for Cornell said the company was unaware of the charges but supports the prosecution. None of the managers now in charge of Cornell were there at the time of the events that involved Weimar, spokesman Charles Seigel said Monday. Company records don't show any evidence of wrongdoing, he added.

"Cornell is a very different company than it was a few years ago," Seigel said. "We have nothing to do with anything that happened back then."

Cornell also has not pursued a private prison in Alaska for years and is no longer interested in that, he said.

The charges against Weimar quote details of four telephone conversations he had with the consultant and the candidate from Aug. 18 to Aug. 23, 2004.

The candidate's campaign funds were depleted in August 2004, when Weimar arranged to pay for a campaign mailer himself at a cost of $3,000, the document says. The candidate said he only had $300 to $400 left in his account.

On Aug. 20, 2004, Weimar told the candidate of an unpaid invoice of $20,000 with the consultant. On Aug. 23, Weimar made arrangements with the consultant to pay off the debt, the charges say. He then called the candidate and told him "he would not be receiving any further bills from Consultant A," the document says.

Weimar is not being charged by indictment but rather by what's known as a criminal "information," which often is used when defendants agree to plead guilty. He is scheduled for a plea hearing this afternoon before U.S. District Judge John Sedwick.

Weimar helped start Allvest in 1985, then bought out his partners and turned it into a multimillion corporation with operations in Alaska and Washington state. Its government contracts were worth an estimated $10 million a year.

The charges don't say whether those calls were from intercepted wiretaps. If they were, it would indicate that the government was listening in on Weimar's phone more than a year before it got court orders to tap the phones of Bill Allen, the chief executive of Veco Corp., a construction and oil-field services company and a partner in the private-prison venture. Allen, who pleaded guilty in May 2007 to bribing legislators, and Veco have become the central figures in the government's corruption investigation.

By 2004, Veco was no longer involved in the prison project, Frank Prewitt, a former state corrections commissioner, Cornell consultant and FBI informant, has said.

Earlier, Veco also was a central player in Alaska's private prison effort. Under early plans, Veco would have built the prison and Cornell would have run it.

For years, one of the main legislative backers of a private prison was then-Sen. Jerry Ward, who represented Anchorage and the Kenai Peninsula.

In 1997, there was a plan to build a private prison in South Anchorage but it crumbled under strong public opposition. As that plan evaporated, Ward emerged as the lead architect of a new plan to build private prisons in the Mat-Su and Seward.

"By God, this really solves the problem," Weimar was quoted as saying at the time.

In 2001, Ward signed on as the only Senate sponsor of a House bill pushing a private prison on the Kenai.

Ward lost his seat in 2002 to Tom Wagoner and was trying to regain it in 2004, only to lose in the Republican primary to Wagoner.

Ward could not be reached for comment today.

The failed private prison effort was also central in the government's case against former state Rep. Tom Anderson, R-Anchorage. Last year, Anderson was convicted of bribery, money laundering and other charges in connection with a scheme to support Cornell's interests in the Legislature and within the Murkowski administration.

But Prewitt actually was working undercover for the FBI when he paid bribes that

Anderson thought came from his role as Cornell consultant. Cornell was unaware of the scheme, the U.S. Justice Department has said.

At Anderson's corruption trial last summer, Prewitt was a key witness who testified at length about recording phone calls and meetings with Anderson, and also about questionable acts in his own past, including accepting money from Weimar.

In April 2004, Prewitt was confronted by the FBI and convinced to help in the investigation, a prosecutor told jurors at Anderson's trial.

From the witness stand, Prewitt said that in 1994 - when he was corrections commissioner and Weimar owned Allvest -- he accepted $30,000 from Weimar. Prewitt testified that he was in a difficult family situation and considered the money a loan, which he repaid the next year, after he left his state post, by working four months for Allvest for free.

Allvest also used to run Allvest Laboratories, which did contract urinalysis work, and ran the city's Animal Control Center and the Community Service Patrol.

In 2002, Allvest was forced into bankruptcy because of unpaid judgments in civil suits against the company. The bankruptcy case eventually was settled.

In the 1970s, Weimar, then in his early 30s, led an insider revolt against state Democratic party regulars who at that time dominated Alaska politics. Weimar and his "Ad Hoc Democrats" opposed the Vietnam War and supported the presidential bid of George McGovern in 1972.

An article about that period published in the Daily News in 1986 described Weimar this way:

"Weimar was a rabble-rouser. The FBI once documented his activities in a 128-page file that included descriptions of his involvement in the civil rights movement in West Virginia and antiwar organizing in Fairbanks.

"At 6-feet-4 and 250 pounds, Weimar had a commanding presence, with his thick, jetblack hair and deep, husky voice. He operated in hyperdrive and had a gift for recalling telephone numbers. In his organizing days, Weimar would sit for hours with a telephone receiver pressed to one ear, dialing number after number organizing and cajoling, forging alliances and making enemies."

Daily News reporters Richard Mauer and Tom Kizzia contributed to this story.


By LISA DEMER
Contact Lisa Demer at LDemer@adn.com or on